Social License to Operate – what about the worker?

The notion of “social license” has become so embedded in the extractive industry lexicon in the past 15 years that it is frequently invoked in CEO speeches, and used to title sustainability reports and industry conferences. And in the past 24 hours it (or rather the lack thereof) has been used as a red flag in the negotiations between Rand Gold and AnglogoldAshanti as they try to formulate a joint venture to re-ignite the Obuasi Mine in Ghana.

Obuasi Gold Mine is located near Obuasi in the Ashanti Region and it started operating in 1897. It was acquired through the merger of between Anglo Gold and Ashanti Goldfields in 2003, which resulted in the formation of AnglogoldAshanti in 2004. Obuasi is well-known for its destructive environmental legacy, labour problems and problems related to illegal ASM activities on its property. A large section of the mine is currently under care and maintenance while its owners seek solutions, one being a possible joint venture with Rand Gold.

Obuasi’s lack of social licence to operate highlights the business case for having social license. Social license in its traditional meaning refers to approval by local communities and stakeholders for a company or a project to operate in the area. Often people will link it only to a specific activity or industry, e.g. a mine, or the extractive industry, but just as often, if not more often now with the availability of the internet, with a specific company. Social license can range for reluctant acceptance of the project to a relationship based on high levels of mutual trust. Perceptions of the company and its employees’ conduct play a big role in whether social licence will be achieved.

What is lacking in this somewhat “narrow” view, is that we consider “society” to be outside and removed from the company or the project or the operation. “Society” is viewed as the affected communities, and other stakeholders, which includes government, NGOs and if one is lucky, the local economy. Very seldom do we actively consider and include the labour force, the workers and the contract staff as part of the society from which we should gain license to operate. Many clients have pointed out to me that human resource issues should be separated from that of the community, forcing a separation between the human resource department and the community relations department, building silos without any real bridges.

At Obuasi the lack of social license to operate is closely linked with labour issues at the mine. In South Africa, there is currently an application for a silicosis class action law suit being brought in front of the courts. It relates to millions of gold mine workers dying from silicosis and the gold mining companies refusing to take care of them, leaving the expenses for the care on the shoulders of impoverished communities. At Marikana, in August 2012, workers protested working conditions and died, and a few months later, in Ghana, the Tarkwa and Damang gold mines had an unprecedented combined strike. These incidents have all significantly reduced or completely removed the respective companies’ social license to operate. The silicosis case is managing to reduce the social license of gold mining to an all-time low.

Isn’t it time for us to include labour in our “society” when we seek a social license to operate?